Now comes the news that Oracle did indeed reach a deal with BEA Systems to acquire it. Not surprisingly it wasn’t at the US$21 a share BEA Systems wanted to “begin negotiations”. Instead Oracle will acquire the company for US$19.375 per share making the offer worth US$8.5 billion. The Board of Directors of BEA Systems unanimously approved the purchase and Oracle hopes to close the acquisition by the middle of this year pending stockholder approval.

When BEA Systems was asking for US$21 a share Icahn fired off a letter to its board in October demanding that they put the initial proposal of US$17 a share up to a vote with the shareholders. He also insisted the board take no action to entrench itself and prevent a possible sale. To appease Icahn, BEA entered in to a non-disclosure agreement with him to provide documentation to support the idea that US$21 is a fair price. Clearly it seems that US$19 was a fair price as well.

I had a sneaking suspicion that this deal would get done in the end and not at the US$21 a share that BEA originally wanted. The BEA Systems Board of Directors probably didn’t want to get into a fight with Icahn over a difference of US$2 a share so they probably felt that US$19 a share was close enough to go ahead with the deal. Just like any good bit of negotiations Oracle and BEA System reached middle ground and got the deal done.

You have to give the BEA Systems Board of Directors credit. They got US$2 more dollars a share out of Oracle. That will make their shareholders happy. Best of all, it will make their largest individual shareholder, Icahn, very happy. Icahn can’t complain too much about getting an extra US$100 million in the deal because the BEA Systems Board of Directors played hard ball.

Now Oracle will have the tough job of showing that the purchase price of BEA Systems was worth it to its own shareholders. You can bet that Oracle will do its part to make sure the incorporation of BEA is done quickly so that it can help Oracle with its bottom line. Now that BEA Systems has been snatched up by Oracle you have to wonder if anyone’s next or is Oracle going to take a pause when it comes to acquisitions now that some of its largest competitors have been gobbled up?